The European Union (EU) has put forward a plan for enhancing connectivity within Asia, and has been dubbed as the Asia Connectivity Strategy.

The EU does not want to give an impression that the Asia Connectivity Strategy (ACS) is a counter to the Belt and Road Initiative (BRI). Yet, senior officials of the EU, while commenting on the broad aims and objectives of the project, have categorically stated that the primary goal of the Asia Connectivity Strategy is enhancing connectivity (physical and digital) while also ensuring that local communities benefit from such a project, and that environmental and social norms are not flouted (this is a clear allusion to the shortcomings of the BRI). There are no clear details with regard to the budget, and other modalities of the project (EU member countries are likely to give a go ahead for this project, before the Asia-Europe Meeting in October 2018). The EU has categorically stated that it would like to ensure that the ACS is economically sustainable.

The US alternative to the BRI is being funded by the recently created United States International Development Finance Corporation (USDFC) (an organization which will merge Overseas Private Investment Corporation and other Development Finance Programs) which came into being after the passing of the BUILD (Better Utilization of Investments leading to Development) Act recently.

It would be pertinent to point out that OPIC (now part of USFDC) has already signed with the overseas finance development arms of Japan and Australia, and is in talks with India to work jointly. Some of the areas being explored for joint investments are energy and infrastructure.

It is not just the US, as even Japan has come with its own alternative, the Partnership for Quality Infrastructure (PQI), to the BRI.

Potential Appeal of the Asia Connectivity Strategy

So the question then arises: why would countries seeking an alternative to China not come on board the American connectivity initiative? The ‘Asia Connectivity Strategy’ may be especially acceptable to leaders who do not want to be seen as blindly following US diktats, but who are also uncomfortable with Beijing’s economic policies, and want to avoid falling into what has been dubbed as Beijing’s ‘debt trap’ diplomacy. A perfect example being Malaysian Prime Minister Mahathir Mohammad, who scrapped projects worth $40 billion, and also referred to the rise of a ‘new colonialism’ being promoted by China. The Malaysian PM has not shared a particularly cordial relationship with the US in the past. While addressing the United Nations General Assembly (UNGA), Mahathir made some interesting points, saying that Malaysians want a Malaysia which seeks relations based on ‘mutual respect’ and a Malaysia that is ‘neutral’ and ‘non aligned.’

EU itself trying to strike a balance

EU Chief Jean Claude Juncker has been pitching for a more pro-active response to Trump’s insular policies, as well as China’s BRI. The EU has already taken a divergent stand from the US on the Iran issue, and has even proposed a Special Purpose Vehicle (SPV) which will ensure that trade with Iran continues prior to the impending US sanctions to be imposed on Iran in November 2018. The SPV was announced, jointly with Russia and China, on the sidelines of the UNGA.

At the UNGA, French President Emmanuel Macron disagreed with Trump’s views on Iran, and supported the 2015 Vienna Accord. Said Macron:

We know that Iran was on a nuclear military path but what stopped it? The 2015 Vienna accord.

It remains to be seen if the SPV set up by EU works or not, but a number of countries which do not want to be part of the Chinese or American orbit would be attracted towards the EU, in spite of all the problems it is facing, due to its capacity (or lack thereof) to take an independent stand.

Asia Connectivity Strategy is not only about competition

It also remains to be seen whether the Asia Connectivity Strategy can gain traction. In terms of connectivity, there may even be strong overlaps with the ‘Indo-Pacific vision’ of the Americans. France, which has strengthened strategic ties with Australia and India, is already seeking to play a pro-active role in the Indo-Pacific.

French President Emmanuel Macron had referred to the need for a strong Paris-Canberra-New Delhi axis during his Australia visit, as a counter to China’s increasing assertiveness.

Interestingly, while there is a realization that an Asian Connectivity Strategy has a competitive element, and there are some clear differences between the EU’s strategy and China’s BRI, there are also some who believe that there is space for collaboration between the Asia Connectivity Strategy and BRI. This point has been put forward by some policy makers and strategic commentators in the EU, as well as sections of the Chinese media. Wang Wen Wen, in an article for the Global Times, argues:

Asia needs Europe as much as it needs China. Since the EU and China are the two largest economic entities in Eurasia, it is vital that they steward the continent’s economic development agenda. Some programs in the BRI have carried out cooperation with the European side on technology and equipment procurement.

In conclusion, the Asia Connectivity Strategy is an interesting idea. A lot will depend upon available resources and the response of potential stakeholders. But the EU going ahead with such an initiative in spite of numerous challenges it is facing is truly laudable.